16 June 2016

Half of U.S. Corn Crop Now Goes to Ethanol

Posted by John Freeland

Source: USDA

Source: USDA

Farming has always been about energy. We eat food for energy our bodies need to survive. But now American farming is increasingly about filling gas tanks as well as bellies. At a typical gas station found along an interstate highway, one can fill up on gasoline blended with 10% ethanol made from corn, pay for it using a plastic card, perhaps made from corn, pull around the side of the building and order a corn-fed beef burger with (delicious) fries cooked in blended corn oil, topped off with a fizzy drink made with corn sweetener. Yes, I live in “corn country,” but, in a way, regardless of your whereabouts, so do you.

The Renewable Fuel Standard (RFS) began with the Energy Policy Act of 2005 and was broadened and extended by the Energy Independence and Security Act of 2007 (EISA). The RFS requires renewable fuel, derived from plants, to be blended into motor fuel in increasing quantities each year, reaching at least 36 billion gallons by 2022.

From the USDA Economic Research Service:

Strong demand for ethanol production has resulted in higher corn prices and has provided incentives to increase corn acreage. In many cases, farmers have increased corn acreage by adjusting crop rotations between corn and soybeans, which has caused soybean plantings to decrease. Other sources of land for increased corn plantings include cropland used as pasture, reduced fallow, acreage returning to production from expiring Conservation Reserve Program contracts, and shifts from other crops, such as cotton. Corn production has also expanded to non-traditional growing areas, especially in the North, as short-season hybrids have been developed.

American farmers increased the acreage of land planted to corn by about 18% since 2000 with a sharp increase following the RFS passage in 2005.

Ethanol production has now grown to the point that there’s more of it available than what can be used domestically under the existing regulations and infrastructure. Ironically, the fuel once touted for helping to make America energy independent is now a major export commodity.